The 'Craigslist of China' is skyrocketing on news of a possible merger

The 'Craigslist of China' has agreed to a merger with Ganji.com,
another China-based classifieds site, according to the
FT's Henny Sender, citing people familiar with the deal.

Shares of 58.com, which trades under the ticker WUBA, rose 28% to
as high as $65.48 per share in trading Tuesday, an all-time high
for the company, which went public in late 2013.

China’s technology sector is booming, raising concerns about a
bubble in the sector.

Here's the FT:

“The latest merger comes at a time when investors are very
bullish about Chinese internet shares but are also concerned that
many of the sector’s companies are burning too much cash as they
subsidies their operations to attract customers."

Last week, we
highlighted a report that the price to earnings ratio of
internet stocks listed in China was 220 times earnings, passing
the Nasdaq earnings multiple of 156 at the height of the tech
bubble.

And with these massive
valuations, western investors in mainland Chinese internet
companies are now beginning to demand more shareholder value,
Sender wrote.